Retirement is an ideal time to travel and rediscover yourself. It’s a time when people can relax from the pressures of work and enjoy their lives. The wise ones started saving money when they were young. These planners might have taken advantage of employer contributions or opportunities to diversify accounts. Divorce is a factor that may have been overlooked.
Baby boomers are experiencing an increase in divorce rates. While couples who divorce in their twenties have less to worry about regarding retirement assets, those who divorce in their fifties and sixties likely have significant funds. Unfortunately,
It is nearly impossible to restart retirement savings after fifty because many of these accounts are dependent on interest growing over time. It is wise to understand the effects of divorce on retirement savings for anyone who finds themselves in this situation.
Divorce, retirement benefit, and Wisconsin family law lawyers surrey
Wisconsin is one of nine states that have a community property system. This means that any property owned by either spouse, except for inheritance or gifts, is considered jointly owned. It is therefore essential to keep a complete list of all assets, including retirement accounts.
Retirement plans can be classified as defined benefit or defined contribution plans. Employers often maintain defined contribution plans. They are usually structured as investment or savings plans. The plan can be paid in a lump sum at retirement, while a defined benefit or pension plan is usually paid in monthly or annual payments.
The next step is to get an accurate valuation of retirement assets once the accounts have been established. Once this has been done, you can either offset or divide your retirement plan. An offset is when a spouse wants to keep their retirement account intact but pays an equal amount to the other party, taking into consideration tax consequences. This is risky for couples over 50, as it can be difficult to rebuild retirement accounts before retirement age. A division allows the account to be divided between the parties. A division is a non-taxable event that occurs when there is a divorce. You can split one retirement account without having to pay taxes or penalties. It is important to note that spouses who want to withdraw funds from the account after division will be subject to tax and possible penalties.
Social Security and Divorce
Not only pensions should be considered, but so is any other retirement benefit. People who have divorced often get social security benefits that are based on the earnings of their spouse. Your ex-spouse may be eligible for benefits if you divorce, regardless of whether you have remarried.
–> The marriage lasted at most 10 years
–> The ex is not married currently
–> The ex must be 62 years old or older
–> If your ex-spouse has higher earnings, you are eligible for social security benefits
Spousal benefits applicants may find it comforting to learn that the ex has not been notified of any filings. The ex’s benefits will not be affected.
Divorce and the importance to an attorney
These are just some of the things you should consider when going through the property division portion of a divorce proceeding. An experienced divorce attorney is a good choice for anyone considering divorce, or currently going through divorce proceedings. A qualified attorney will help you understand the process and guide you through it, helping to ensure a better outcome.